English

What are the risks of investing in early-stage companies?

Modified on: Mon, 6 Feb, 2017 at 2:27 PM

Investing in early-stage companies comes with great opportunities and risks. If the company fails, which is not uncommon, investors will lose their invested capital. The company may also grow but without generating any substantial profits for its investors. Finally, the company may not grow as expected and may have to raise more money at a lower valuation.

It is important to note that 1) even successful early-stage companies rarely distribute any dividends since they need their capital for growth and 2) finding a buyer at the time you want to sell your share may be difficult. For more information about risks, please refer to our risk policy.